Migration Selectivity and the Evolution of Spatial Inequality

Standard models of labor migration suggest that migration is induced by real income differentials across locations and will, ceteris paribus, serve to reduce those differentials. And yet there is evidence that growing spatial inequality may co-exist with increased migration from poorer to richer areas, at least over certain ranges. At a theoretical level, this raises the question of modeling opposing forces, for convergence and divergence, in a common framework, and identifying the precise conditions under which the tendency for convergence dominates, or is dominated by, the forces for divergence. A conventional route to introducing forces for divergence is to bring agglomeration effects into the standard setup. This paper explores an alternative route, based on a theoretical and empirical proposition of the migration literature, namely, that migration is a selective process. Focusing on skilled migration, the paper demonstrates the different forces in play that make selective migration a force for both divergence and convergence, and characterizes where each set of forces dominates. Finally, it explores the consequences for convergence of combining migration selectivity and agglomeration effects arising from migrant networks